EU attacks 'optimistic' economic outlooks

Spain is among the country's the EU has expressed concern over

The European Union has criticised the UK and other European nations for having "optimistic" growth assumptions and bloated deficits.

The UK must tackle "uncertainty" in plans to cut its deficit, the EU said.

EU rules say government deficits must be below 3% of GDP, but the UK's deficit is expected to hit £178bn - or 12.6% of GDP - this year.

Germany, France, Spain and Italy were also warned they were over-reliant on economic recovery to meet debt targets.

Brussels was commenting on plans by some of the biggest EU countries to bring down public spending.

'Absence of detail'

As was reported earlier in the week, the report warned that the UK was not on course to cut its deficit in line with EU rules by a deadline of 2015.

"The absence of detailed departmental spending limits is a source of uncertainty," the European Commission said.

The UK chancellor argues it has been right not to cut spending more quickly

In the run-up to next week's Budget, UK chancellor Alistair Darling has defended the government's approach to the deficit, arguing that cutting it too quickly by reducing government spending would risk harming the UK's emergence from recession.

The shadow chancellor, George Osborne, said the report's conclusions - that the government needed to cut spending more rapidly - were "a heavy blow for Gordon Brown's credibility".

One of the other countries criticised was Spain. The report said Spain's forecast that it would cut its deficit to 3% of GDP in 2013 from 11.4% in 2009 was based on "markedly" optimistic growth forecasts.

The pace of bank restructuring in Spain, which the EU said posed a risk to growth, was also attacked as being too slow.